Debate about the true market value of Telstra shares and about the Essay

Debate most the true market entertain of Telstra shares and about the financial management of the company - Essay ExampleAside from the aforementioned services, it is also involved in the provision of cable distribution and management of craft information technology or telecommunication services. The company also provides wholesale services to other carriers, carriage service providers, and Internet service providers (Telstra Corporation trammel 1).The company has made its IPO (initial public offering) in 1991. Currently, the company is under joint public/private ownership, with the Australian government holding 51.8% of its share as of the mid-2005 (Telstra 1). The privatization of Telstra has begun in the late 1990s by the coalition government. However, full privatization which would mean divesting all the governments shares had been blocked until the 14th of September 2005.The true esteem of the companys stock is currently under hot speculation from the different industry pla yers. Experts assert that the companys stock is overvalued as virtually financial information were revealed to the government, the companys largest stakeholder yet remained concealed to the remaining 1.6 million shareholders. The company had allegedly borrowed US$500 million from its reserves to ascertain its dividend payout in 2005 and another US$2.5 billion for its dividend obligations in 2006. It was also reported that the company needs a minimum of US$3 billion bills outlay in order to rehabilitate its faulty lines. This investment is necessary as Telstra Limited Corporation had not been making investments to maintain its lines (Haynes 20-21).This information significantly affected the value of the telecommunication giant as investors become wary of the true performance of the company and its future directions. During the first week of September, the market value of its stocks plunged to its lowest in two years. Stock prices further dipped reaching $4.00.After its IPO in 199 7, Telstra Corporation Limited has become a advantageous investment in security, giving healthy